Trumponomics 2.0 will erode the foundations of America’s prosperity

WAS it just a false alarm? The panic about the world economy that followed US President Donald Trump’s “Liberation Day” tariffs in April has given way to growing optimism. Tariffs’ inflationary effect has so far been muted. In private, bosses say they now expect trade fights to produce trade deals, not to be an end in themselves. Surveys show that business and consumer confidence, though low, is improving. The S&P 500 index of stocks has hit a record high.

And as we report, the One Big Beautiful Bill Act (BBB) that passed the Senate on Jul 1 looks more like traditional tax-cutting, spending-slashing Republicanism worthy of Paul Ryan or Mitt Romney than it does a Maga (Make America Great Again) fantasy. Suddenly, business leaders are again willing to see Trump as the populist from his first term: a man to be taken seriously, but not literally.

Unfortunately, the BBB is likely to cast a shadow over this sunny picture. It illustrates the long-term damage Trump is doing to the foundations of America’s economy.